JAMES CUNNINGHAM APPELLANT v. DANA CUNNINGHAM APPELLEE

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Court of Appeals of Kentucky.

JAMES H. CUNNINGHAM APPELLANT v. DANA T. CUNNINGHAM APPELLEE

NO. 2010–CA–002090–MR

Decided: June 15, 2012

BEFORE:  COMBS, MOORE, NICKELL, JUDGES. BRIEFS FOR APPELLANT:  John H. Keeton Winchester, Kentucky BRIEF FOR APPELLEE:  John H. Rompf Winchester, Kentucky

NOT TO BE PUBLISHED

OPINIONAFFIRMING IN PART, REVERSING IN PART, AND REMANDING

James Cunningham appeals from the Clark Family Court's Amended Findings of Fact, Conclusions of Law, and Decree dissolving his marriage to Dana Cunningham.   After a thorough review, we affirm in part, reverse in part, and remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

James and Dana were married on July 20, 2002.   The parties have two minor children.   At the time of the parties' separation in late 2008, the parties agreed upon a temporary time-sharing schedule.   The parties deviated from the agreed schedule for a period of about six months during which time Dana underwent training for a new job, and the parties briefly attempted to reconcile.

The family court entered an initial decree of dissolution resolving all issues regarding custody, time-sharing, child support, property division and attorney fees on June 25, 2010.   The parties subsequently filed motions for additional findings of fact and to alter, amend, and vacate the decree.   Ultimately, the family court entered its final amended decree on November 1, 2010.

The family court awarded 60% of the marital property to James and 40% to Dana. The family court further determined that the parties would share joint custody of their minor children with neither party designated as primary residential custodian, ordered James to pay $1,532.96 Double per month in child support, and ordered James to pay a portion of Dana's attorney fees in the amount of $6,238.20.   James now appeals.   We will address each of James's arguments in turn.

II. ANALYSIS

a. Custody/Time-sharing

James asserts that the family court did not make sufficient findings to support its determination with respect to custody and time-sharing.   Specifically, James argues that the court failed to consider the factors set forth in KRS  Double 403.270 and to make findings regarding the children's best interest.

Family courts have broad discretion in making determinations with respect to child custody and time-sharing, and we will not disturb such a determination absent an abuse of discretion.  B.C. v. B.T., 182 S.W.3d 213, 219 (Ky.App.2005).   The test for an abuse of discretion is whether the family court's decision was “arbitrary, unreasonable, unfair, or unsupported by sound legal principles.”  Goodyear Tire & Rubber Co. v. Thompson, 11 S.W.3d 575, 581 (Ky.2000) (citing Commonwealth v. English, 993 S.W.2d 941, 945 (Ky.1999)).   Additionally, we decline to substitute our judgment with respect to the family court's factual findings unless those findings are clearly erroneous because the family court is in the best position to evaluate the parties' testimony.  B.C., 182 S.W.3d at 219;  CR  Double 52.01.

In the case sub judice, the family court awarded Dana and James joint custody and equal time-sharing.   In doing so the court did not specifically state that that the custodial or time-sharing arrangement was in the children's “best interest.”   Nonetheless, it is clear from the family court's findings that it evaluated the children's best interests.   The family court found that the parties had been able to facilitate the joint custody arrangement during their separation;  that the children were doing well in school;  had a very close relationship with each of the parties;  were well cared for and received nurturing from both parties;  and would benefit from qualities possessed by both James and Dana. Accordingly, we find no abuse of discretion regarding this issue.

James also argues that the family court should have designated him as the children's primary residential parent.   He asserts that he is better suited to provide a stable schedule and academic support for the children and that the record reflects that Dana is unable to properly care for the children.   The term “primary residential parent” is used to denote that the children primarily live in one parent's home and identify that home as their primary residence.   Pennington v. Marcum, 266 S.W.3d 759, 765 (Ky.2008).   However, a family court has discretion to determine whether a primary residential parent should be designated.   See id. (“one parent may be designated as the ‘primary residential parent’ ”) (emphasis added).

Here, the family court evaluated the testimony of James and Dana and concluded that they were generally successful in their efforts to cooperate with one another to jointly make decisions regarding the children;  had managed to work together to provide for the children's daily needs;  and were equally capable of caring for the children.   Furthermore, the family court found that the children benefited from spending time with both James and Dana. Although James vehemently disagrees with the family court's findings, the law is clear that the family court is in the best position to evaluate whether designation of a primary residential parent was necessary.   James, of course, cites to all facts favorable to him.   And, while the record does contain some statements that paint Dana in an unfavorable light, these were credibility and factual issues for the family court to resolve.   Given both the record and deference due to the family court in making factual findings, there was no error.

b. Child Support

As mentioned, the family court set James's child support obligation at $1,532.96 per month.   As a preliminary matter, James argues that the family court erred by imputing Dana's income at minimum wage, as opposed to her most recent wage of $10.75 per hour.   We find no error with respect to the family court's imputation of income to Dana.

If a parent is voluntarily unemployed or underemployed, child support shall be calculated based on a determination of potential income ․ Potential income shall be determined based upon employment potential and probable earnings level based on the obligor's or obligee's recent work history, occupational qualifications, and prevailing job opportunities and earnings levels in the community.

KRS 403.212(2)(d).

The family court concluded that Dana was capable of working forty hours a week at minimum wage.   Although James contends that the family court should have imputed Dana's most recent wage when calculating support, James concedes in his brief that Dana made little or no monetary contribution to the marriage and that Dana's previous attempts to generate income had failed.   Moreover, the evidence of record supports that Dana was a student and a homemaker during the marriage and was not employed during the parties' marriage.   Dana's income disclosure reveals that within the five years prior to the parties' divorce she worked approximately seven months and earned $1,400 per month.   Dana also obtained a real estate license during the marriage, and James concedes that she did not generate any significant income from her work as a real estate agent.   Additionally, Dana's 2009 income tax return reflects that she earned $12,606. Double Accordingly, we find no error where the family court imputed monthly income to Dana at $1,256, or approximately $15,000 per year.

James also contends that the family court should have reduced his obligation due to the fact that the parties have essentially equal time with the children.   He points to the fact that prior to establishing the child support award, the family court commented that “[James] should not be, in my mind, paying, what a sole custodian would receive from a non-custodial parent – which is basically what [James's current child support obligation] is.   My problem is, I cannot find any statutory authority, or any other type authority that would allow me to reduce the [amount as established by the child support work sheet] in half.”

The child support guidelines create a rebuttable presumption for the establishment and modification of child support.  KRS 403.211(2).   However, a court may deviate from the guidelines upon finding that application of the guidelines would lead to an unjust or inappropriate result provided that the family court enters sufficient findings of fact to support the deviation.   Downing v. Downing, 45 S.W.3d 449, 454 (Ky.App.2001) (emphasis added);  KRS 403.211(2), (3).

Admittedly, “Kentucky's child support guidelines do not contemplate

․ a shared custody arrangement, [and] they do reflect the equal duty of both parents to contribute to the support of their children in proportion to their respective net incomes.”  Plattner v. Plattner, 228 S.W.3d 577, 579 (Ky.App.2007).   Accordingly, courts are permitted to deviate from the guidelines where application of the guidelines would lead to an unjust or inappropriate result.  Downing, 45 S.W.3d at 454;  KRS 403.211(2)-(3).   A deviation where an unjust or inappropriate application of the guidelines exists is warranted in instances where the parties' combined monthly gross income is in excess of the guidelines. Double A deviation may also be warranted where other circumstances of an “extraordinary nature” exist, such as in situations where both parents have “nearly equal physical time with the children, nearly equal income[s], and nearly equal expenditures for child-related expenses.”  Dudgeon v. Dudgeon, 318 S.W.3d 106, 111 (Ky.App.2010);  KRS 403.211(3)(e), (g).  Given that the family court was mistaken regarding whether the law allows for a deviation in child support, we reverse this portion of the family court's judgment and remand for the family court to reconsider the matter and make additional findings of fact consistent with the above-cited authorities.

c. Division of Property

As mentioned previously, the court divided the marital property with James receiving 60% of the marital assets and Dana receiving 40%.   James argues that the family court's division of marital property was not supported by the evidence of record.   Due to his greater contribution, James contends that the family court should have awarded him 75% of the marital assets.

Decisions regarding the distribution of marital property are within the sound discretion of the trial court and will not be disturbed absent an abuse of discretion.  Kleet v. Kleet, 264 S.W.3d 610, 613 (Ky.App.2007).   A court is required only to divide marital property in “just proportions.”  Brosick v. Brosick, 974 S.W.2d 498, 503 (Ky.App.1998);  KRS 403.190(1).

The family court found that the parties had made equal contributions to the marriage.   The record establishes that James was primarily responsible for earning a living for the family, but Dana contributed by caring for the children, maintaining the home, and managing the parties' rental properties.   Thus, the family court's finding that Dana made an equal contribution even where she did not work outside of the home and that the parties made an equal contribution to the marital estate was not in error. Double We therefore conclude that, based upon the family court's finding of an equal contribution to the marriage and its decision to nevertheless award James more than half of the marital estate,Double the family court did not abuse its discretion.

James also asserts that the family court failed to award him $114,000 of nonmarital funds that were used to pay mortgage payments on the marital residence throughout the parties' marriage.   The parties' prenuptial agreement provides that traceable nonmarital funds would remain the nonmarital property of the contributing party.

The parties' prenuptial agreement provided, in part:

All property, real, personal or otherwise, acquired after the marriage of the parties and derived from specifically identifiable and trace proceeds of Pre–Marital Property and all dividends, income, or earnings attributable, specifically identifiable and traceable from Pre–Marital Property, shall be the separate property of the party who originally acquired said property, with all rights, title and interest therein exclusively in that party.   Any appreciation of, improvements to, or income earned by or from Pre–Marital Property shall also be considered Pre–Marital Property and belong to the owner of the property which produced it.   Commingling of the parties' Pre–Marital Property or the proceeds or earnings therefrom shall not be construed or considered to have changed the character of such Pre–Marital Property into marital property if such commingled property, proceeds or earnings is specifically identifiable and traceable.

James claims that he paid $114,000 toward the mortgage of the parties' marital residence from income from his nonmarital real estate and should be credited accordingly.   As outlined above in the parties' prenuptial agreement, all traceable income from pre-marital property is to remain the premarital property of the acquiring party.  “ ‘Tracing’ is defined as ‘the process of tracking property's ownership or characteristics from the time of its origin to the present’․  ‘[T]he nonmarital claimant must trace the previously owned property into a presently owned specific asset.’ ”  Crawford v. Crawford, 358 S.W.3d 16, 21 (Ky.App.2011) (quoting Sexton v. Sexton, 125 S.W.3d 258, 266 (Ky.2004)).   In other words, the claimant must “establish by clear and convincing evidence that the funds used to purchase the property and build the improvements were traced to his nonmarital assets.”  Id. James provided no documentation to support his assertions that the money used to pay the mortgage was from income derived from nonmarital assets, and thus failed to meet his burden of proof with respect to nonmarital assets. Double Accordingly, there is no error.

d. Valuation of Marital Property

James also claims that the trial court erred by using March 31, 2010, as the valuation date for the marital estate rather than the date of separation.   He contends that Dana did not contribute to the marital estate after their separation and should not benefit from any appreciation that occurred thereafter. Double

We review the family court's valuation of marital assets for an abuse of discretion.  Young v. Young, 314 S.W.3d 306, 308 (Ky.App.2010) (citing Armstrong v. Armstrong, 34 S.W.3d 83, 87 (Ky.App.2000)).   James cites to no authority mandating that the valuation of marital property must be as of the date of the parties' separation.   Moreover, pursuant to KRS 403.190(3), property subject to division in a divorce action retains its marital status until the entry of the decree.   See also Stallings v. Stallings, 606 S.W.2d 163, 164 (Ky.1980).   The Kentucky Supreme Court has also rejected the argument that a homemaker spouse no longer makes a contribution to the marital estate post-separation even where a wife is no longer “providing services directly to her spouse.”  Id. Instead, the Stallings Court observed that a wife may continue to make a contribution to the marital estate post-separation by caring for the children and “thus continuing to enhance to some degree [the husband's] ability to earn a living.”  Id.

Here, the family court observed that both parties had exercised equal time with the children during their separation.   Similarly, it appears that the parties made a brief attempt to reconcile.   Although James contends that he was primarily responsible for the care of the children as well as supporting the children and Dana during the parties' separation, his representation of the parties' roles throughout the marriage reflected a similar arrangement.   Thus, in light of James's representations, there was no apparent change in the level of contribution provided by Dana. Accordingly, the trial court did not abuse its discretion by using a post-separation valuation date when apportioning the parties' property.

e. Attorney Fees

As mentioned previously, the family court ordered James to pay a portion of Dana's attorney's fees.   In its order, the family court held that “[b]ecause of the disparity in income, [James] shall pay to [Dana's] attorney a portion of the fee representing sixty percent (60%) of said amount within sixty (60) days.”  (Emphasis added).   James asserts that the family court erred by failing to consider Dana's financial resources and ability to pay her own attorney fees.

We cannot reach the merits of James's argument because, as Dana correctly argues, James's failure to name her attorney as a party to this appeal was a fatal error.   Dana's attorney became an indispensible party to the appeal with respect to the issue of attorney fees when the court ordered James to pay his portion of the fees to Dana's attorney.   See, e.g., Neidlinger v. Neidlinger, 52 S.W.3d 513, 519 (Ky.2001) (ordering a party to pay fees directly to the attorney permits the attorney to “ ‘enforce the order in his own name’ and, thus, [the attorney] is the real party in interest and a necessary and indispensible party to any appeal from that order”).   Thus, this issue is not properly before the Court.

For the foregoing reasons, the Clark Family Court's Amended Findings of Fact and Conclusion of Law are affirmed in part, reversed in part, and remanded with instructions to enter findings of fact and conclusions of law in conformance with this opinion.

ALL CONCUR.

MOORE, JUDGE: